Updated Fri Oct 9 09:23 ET
NYMEX Oil Pre-opg: Seen up in bounce tied to Mexico port woes
OPENING CALL: Crude oil futures: Up 15-20 cents per barrel
Heating oil: Up 25-50 points per gallon
Gasoline: Up 25-50 points per gallon
By Peter Rosenthal, Bridge News
New York--Oct 9--NYMEX energy futures are expected to rise, bouncing
from a 2-day sell-off, as a pair of key Mexican crude oil ports remain
shut, cutting exports by 920,000 barrels per day. Dangerous weather
conditions shut the Pajaritos and Dos Bocas ports Thursday.
* * *
Despite the concern about crude supplies from Mexico and Nigeria, where
nearly 500,000 bpd of crude production has been shut-in, the market
maintains a bearish tone, brokers said. A move higher today would mainly be
based on technical factors. Nov crude has shed more than $1.20 per barrel
since Tuesday, hitting another 3-week low Thursday.
"It went out near its lows," a broker said. "There was a technical
recovery overnight."
Nigeria's largest exporter, Shell, declared force majeure on its Bonny
and Forcados crudes Thursday because of local protesters action. And
Italy's Agip, an operator in the Brass River region, has declared force
majeure on 120,000 bpd.
But that news was ignored during the market's plunge Thursday.
"This bounce is related to (the export problems), but they hit it too
hard yesterday. It's a little correction," a broker said. However, since
many commodity investment funds liquidated positions during the slide, they
are not likely to rejoin the fray today.
"I don't think we're going to attract a lot of buying interest," a
broker said. "A lot o the funds bailed out yesterday."
The market remains pressured by abundant stockpiles of crude and
products. Inventories failed to thin significantly last week despite a
hurricane impacting US Gulf of Mexico production and imports.
Nov crude resistance is seen at about $14.60, "but $15.00 is going to
be tough to get through."
On the downside, Nov crude has support around $14.24, with a gap below
that all the way to $13.98. A nearby crude contract has not been below
$14.00 since Sep 3.
NYMEX Nov crude (CLX8) ended the overnight Access session up 16c at
$14.58. Nov heating oil (HOX8) ended up 45 points at 39.90c, while Nov
gasoline (HUX8) ended up 40 points at 43.70c. IPE Nov Brent crude (OILX8)
last was up 15c at $13.33.
UPCOMING:
--NYMEX Nov crude options expire Thursday; Nov crude futures expire Oct 20.
Nov product options expire Oct 27; while Nov product futures go off the
board Oct 30.
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